Deciding How Cool India Should Be

Helping to control the mosquitos and the temperature, a new air conditioner in a bank manager’s Delhi apartment let his children do their late night studying.

Fearing for their son’s health and suffering from sweaty sleepless nights, an Indian family living in 2 windowless basement rooms borrowed money to buy an air conditioner.

Where are we going? To Kigali climate deal tradeoffs.

Kigali Dilemmas

One of the cheapest ways to provide air conditioning (AC) is also the most environmentally harmful. As a result, 197 nations decided everyone had to stop using the hydrofluorocarbon (HFC) gases used for air conditioning units. But it was not that simple. While developed nations could afford pricier AC, developing nations like India cannot.

Described in a 2015 paper from UC Berkeley economists, the problem relates to temperature, income and AC demand. While Mexico provided their data, India was in their conclusions. Essentially, their point was that when a developing nation hits a certain level of income, AC use soars.

In their list of the top 12 countries with air conditioning potential. India is at the top. Thinking of temperature, India has 3,120 “cooling degree days” per person. (For China the number is 1,046 and the U.S., 882.) Then for income, they are becoming increasingly affluent. You see where this takes us. Their AC use is about to soar.

And India wants it to soar. They need their AC to improve human capital. They need cool factories. They want an increasingly affluent population to be able to buy inexpensive air conditioners.

With India saying it needs more time, the Kigali pact established three deadlines for limiting use of HFC gases:

2024: a group of developing nations freeze consumption levels and then reduce use of HFCs.

2028: another group of developing nations freeze consumption levels and then reduce use of HFCs.

India is in the 2028 group.

To solve their next dilemma, in 2017, the Kigali signatory nations have to figure out who gives what to a fund that helps the developing countries.

Our Bottom Line: Tradeoffs

When the benefits of permitting air conditioning with HFCs includes helping factories, improving human capital and affirming social mobility, it can be tough to make it less accessible.

My sources and more: The NY Times has taken a close look at India’s tradeoffs here while the best description of the Kigali deal was in FT. But, if you want the math on how air conditioning, income and temperature relate, I recommend this paper and this summary.

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Elaine Schwartz has spent her career sharing the interesting side of economics. At the Kent Place School in Summit, NJ, she has been honored through an Endowed Chair in Economics and the History Department chairmanship. At the same time, she developed curricula and wrote several books including Understanding Our Economy (originally published by Addison Wesley as Economics Our American Economy) and Econ 101 ½ (Avon Books/Harper Collins). Elaine has also written in the Encyclopedia of New Jersey (Rutgers University Press) and was a featured teacher in the Annenberg/CPB video project “The Economics Classroom.” Beyond the classroom, she has presented Econ 101 ½ talks and led
workshops for the Foundation for Teaching Economics, the National Council on Economic Education and for the Concord Coalition.